Present Value Calculator

Calculate what a future sum is worth today at a given discount rate.

By Konstantin Iakovlev · Updated April 2026 · Source: SEC

$
%

Present Value

$50.8K

Discount Amount

$49.2K

Future Value

$100.0K

Present Value Calculation

FormulaPV = FV / (1 + r)^n
Future Value$100,000.00
Discount Rate7.00%
Years10
Present Value$50,834.93
Discount (time value of money)$49,165.07

PV of $100.0K at Different Rates (10 years)

3% discount rate$74.4K
5% discount rate$61.4K
7% discount rate$50.8K
10% discount rate$38.6K

Use the Present Value Calculator above to calculate your results. Enter your values and see instant results — all calculations run in your browser.

Disclaimer: This calculator is for informational purposes only and does not constitute tax, financial, or legal advice. Results are estimates based on the information you provide and current rates. Always consult a qualified tax professional or financial advisor for advice specific to your situation.

How It Works

Present value answers a deceptively simple question: what is a sum you will receive later actually worth right now? Because inflation chips away at purchasing power and money in hand can be put to work earning returns, a dollar today outweighs a dollar tomorrow. Pin down the present value of, say, a $10,000 bonus you are promised in 2026, and you can weigh it honestly against an investment you could make today or a need you have right now.

The calculation runs on the formula PV = FV / (1 + r)^n, where FV is the future value, r is the discount rate written as a decimal, and n is the number of periods before the money arrives. In effect it runs compounding in reverse, pulling a future amount back to its equal value in present terms. The discount rate stands in for your opportunity cost, the return you would otherwise earn by putting the same money into an alternative investment.

Choosing the discount rate is where judgment matters most. Set it to reflect the investment options genuinely available to you or the interest rates the market is offering, rather than an arbitrary number. Because inflation steadily erodes what your money can buy, a higher rate often fits longer horizons, particularly given the Federal Reserve's inflation target, which for 2026 still sits around 2%. One more detail worth watching is compounding frequency, since this tool assumes it happens annually.

Example: Evaluating a Future Inheritance

  1. 1 Imagine you are promised an inheritance of $50,000 in 3 years (in 2026). You believe you could earn an average annual return of 5% on your investments.
  2. 2 Using the formula: PV = $50,000 / (1 + 0.05)^3. This calculates to $50,000 / (1.05 * 1.05 * 1.05) which is $50,000 / 1.157625.
  3. 3 The present value of that $50,000 inheritance, discounted at 5% over 3 years, is approximately $43,191.88.
  4. 4 This means that $43,191.88 today, invested at a 5% annual return, would grow to $50,000 in 3 years. This present value helps you understand the true worth of that future inheritance in today's terms.

Source: SEC · Last updated: April 2026

Frequently Asked Questions

What is present value and why does it matter?
Present value is what a future sum of money is worth today, adjusted for the time value of money. $100,000 received in 10 years is worth less than $100,000 today because today money can be invested and grow. PV helps compare financial options occurring at different times.
How do I calculate present value?
PV = Future Value / (1 + r)^n, where r is the discount rate and n is the number of periods. At a 6% discount rate, $100,000 in 10 years has a present value of $100,000 / (1.06)^10 = $55,839. The higher the discount rate or time period, the lower the present value.
What discount rate should I use?
Use a rate that reflects your opportunity cost. For comparing investments, use your expected portfolio return (7-10%). For valuing pension payments, use a lower rate (4-6%). For conservative personal planning, use inflation rate (2-3%). A higher discount rate reduces the present value of future money.

You might also need

Compound Interest Calculator — See Your Money Grow Over Time

Calculate compound interest with regular contributions and see how your money grows with daily, monthly, or annual compounding. Free, instant results and charts.

Inflation Calculator

Calculate the impact of inflation on purchasing power over time. See how much past dollars are worth today.

Net Worth Calculator

Calculate your net worth by adding up assets (savings, investments, property) and subtracting liabilities (loans, credit cards).